We periodically complete business combinations that align with our business strategy. Acquisitions are accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date and that the results of operations of each acquired business be included in our consolidated statements of comprehensive income from their respective dates of acquisitions. Acquisition costs are recorded in selling, general and administrative expenses as incurred.

 

On the Company acquired the stock of Trevigen Inc. for approximately million, net of cash received. The Company has had a long-standing business relationship with Trevigen as a distributor of its product line. The goodwill recorded as a result of the acquisition represents the strategic benefits of growing the Company’s product portfolio and the expected revenue growth from increased market penetration. The goodwill is deductible for income tax purposes. The business became part of the Biotechnology reportable segment in the quarter of fiscal Purchase accounting was finalized during the quarter. The preliminary and final fair values of the assets acquired and liabilities assumed are as follows (in thousands):

		Preliminary Allocation at Acquisition Date				Adjustments to Fair Value				Final Opening Balance Sheet Allocation
Current assets, net of cash		$	1,662							$	1,662
Equipment and other long-term assets			154				(101	)			53
Intangible assets:
Developed technology			3,800				1,300				5,100
Trade name			1,400				(1,240	)			160
Customer relationships			1,900				(1,640	)			260
Goodwill			4,595				1,396				5,991
Total assets acquired			13,511				(285	)			13,226
Liabilities			92				295				387
Deferred income taxes, net			2,785				(590	)			2,195
Net assets acquired		$	10,634			$	10			$	10,644
Cash paid, net of cash acquired		$	10,634			$	10			$	10,644

As summarized in the table, there were adjustments totaling million to goodwill during the measurement period. These adjustments primarily relate to refinements made to acquired intangible asset cash flow models, and updates to opening balance sheet deferred tax assets and liabilities upon completion of the income tax return.

 

Tangible assets acquired, net of liabilities assumed, were recorded at fair value on the date of close based on management's assessment. The purchase price allocated to developed technology, trade names, and customer relationships was based on management's forecasted cash inflows and outflows and using a relief-from-royalty and a multi-period excess earnings method to calculate the fair value of assets purchased. The developed technology is being amortized with the expense reflected in cost of goods sold in the Consolidated Statement of Earnings and Comprehensive Income. Amortization expense related to trade names, and customer relationships is reflected in selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive Income. The amortization periods for intangible assets acquired in fiscal are years for developed technology, years for customer relationships, and years for trade names. The deferred income tax liability represents the net amount of the estimated future impact of adjustments for costs to be recognized upon the sale of acquired inventory that was written up to fair value and intangible asset amortization, both of which are deductible for income tax purposes.

On the Company acquired the stock of Atlanta Biologicals, Inc. and its affiliated company, Scientific Ventures, Inc., for approximately million, net of cash acquired. The transaction was financed through available cash on hand and an additional draw from the Company’s line-of-credit. Atlanta Biologicals fetal bovine serum (FBS) product line strengthens and complements our current tissue culture reagents offering and furthers our efforts to provide more complete solutions to our research customers. The goodwill recorded as a result of the acquisition represents the strategic benefits of growing the Company’s product portfolio and the expected revenue growth from increased market penetration. The goodwill is deductible for income tax purposes. The business became part of the Biotechnology reportable segment in the quarter of fiscal Purchase accounting was finalized during the quarter. The preliminary and final fair values of the assets acquired and liabilities assumed are as follows (in thousands):

 

		Preliminary Allocation at Acquisition Date				Adjustments to Fair Value				Final Opening Balance Sheet Allocation
Current assets, net of cash		$	18,678			$	(2,956	)		$	15,722
Equipment and other long-term assets			4,348				553				4,901
Intangible assets:
Developed technology			9,000				14,700				23,000
Trade name			1,000				1,300				2,300
Customer relationships			1,500				1,400				3,600
Goodwill			21,695				(11,500	)			10,195
Total assets acquired			56,221				3,497				59,718
Liabilities			90				-				90
Deferred income taxes, net			4,845				3,509				8,354
Net assets acquired		$	51,286			$	(12	)		$	51,274
Cash paid, net of cash acquired		$	51,286			$	(12	)		$	51,274

 

As summarized in the table, there were adjustments totaling million to goodwill during the measurement period. These adjustments primarily relate to refinements made to acquired intangible asset cash flow models, and the calculation of the fair value of acquired inventory.

 

Tangible assets acquired, net of liabilities assumed, were recorded at fair value on the date of close based on management's assessment. The purchase price allocated to developed technology, trade names, and customer relationships was based on management's forecasted cash inflows and outflows and using a relief-from-royalty and a multi-period excess earnings method to calculate the fair value of assets purchased. The developed technology is being amortized with the expense reflected in cost of goods sold in the Consolidated Statement of Earnings and Comprehensive Income. Amortization expense related to trade names, and customer relationships is reflected in selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive Income. The amortization periods for intangible assets acquired in fiscal are years for developed technology, years for customer relationships, and years for trade names. The deferred income tax liability represents the net amount of the estimated future impact of adjustments for costs to be recognized upon the sale of acquired inventory that was written up to fair value and intangible asset amortization, both of which are deductible for income tax purposes.

On acquired Eurocell Diagnostics SAS a company based in Rennes, France for approximately million, net of cash acquired.  million was paid on the acquisition date and the remaining million will be paid on The Company has had a long-standing business relationship with Eurocell as a distributor of its product line. Eurocell sells directly to the laboratory markets in the French region as well as servicing the EMEA markets via a network of distributors. The transaction was financed through cash on hand.  The primary asset in this acquisition is the customer relationships, however, the acquisition resulted in some goodwill as we expect strategic benefits of revenue growth from increased market penetration. The goodwill is deductible for income tax purposes. The business became part of the Company’s Diagnostics reportable segment in the quarter of fiscal Purchase accounting was finalized during the quarter.  The preliminary and final fair values of the assets acquired and liabilities assumed are as follows (in thousands):

 

		Preliminary Allocation at Acquisition Date				Adjustments to Fair Value				Final Opening Balance Sheet Allocation
Current assets, net of cash		$	512			$	-			$	512
Equipment and other long-term assets			188				-				188
Intangible assets:
Customer relationships			6,272				-				6,272
Goodwill			113				2,797				2,910
Total assets acquired			7,085				2,797				9,882
Liabilities			483				-				483
Deferred income taxes, net			2,070				-				2,070
Net assets acquired		$	4,532			$	2,797			$	7,329
Cash paid, net of cash acquired		$	3,136			$	2,797			$	5,933
Consideration payable		$	1,396			$	-			$	1,396

As summarized in the table, there were adjustments totaling million to goodwill during the measurement period. These adjustments primarily relate to the finalization of our opening balance sheet audit procedures and identification of acquired assets.

 

Tangible assets acquired, net of liabilities assumed, were recorded at fair value on the date of close based on management's assessment. The purchase price allocated to customer relationships was based on management's forecasted cash inflows and outflows using a multi-period excess earnings method to calculate the fair value of assets purchased. Amortization expense related customer relationships is reflected in selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive Income. The amortization period for customer relationships acquired in fiscal is years. The deferred income tax liability represents the net amount of the estimated future impact of intangible asset amortization, which is deductible for income tax purposes.

On the Company acquired ACD for approximately million, net of cash acquired, plus contingent consideration of up to million as follows:

 

 

The Company paid approximately million, net of cash acquired and the working capital adjustments, as of the acquisition date. The remaining million was paid to current employees who held ACD unvested stock as of the acquisition date. In order to receive payment for unvested shares, the individuals had to remain employees of ACD over an -month vesting period which extended from the acquisition date through Any amounts that would have been owed to individuals who left the company during the vesting period was pooled together and distributed amongst the other former ACD shareholders at the end of the vesting period. Management determined that million of the million represented purchase price consideration paid for pre-acquisition services. However, the remaining million represented compensation expense as the amount the individual employees received was tied to future service. This liability recorded on the Consolidated Balance Sheets under the caption “Salaries, wages and related accruals” for the fiscal year ended

 

During the quarter of fiscal management determined that the calendar year revenue milestone was met. During the quarter of fiscal management determined that the calendar year revenue milestone was met. Refer to Note for discussion of this item as well as discussion of the changes to the fair value estimate for the calendar year revenue milestones as of and

 

The goodwill recorded as a result of the ACD acquisition represents the strategic benefits of growing the Company's product portfolio and the expected revenue growth from increased market penetration from future products and customers. The goodwill is deductible for income tax purposes. The business became part of the Company’s Biotechnology reportable segment in the quarter of

 

As previously disclosed, ACD was acquired on The unaudited pro forma financial information below summarizes the combined results of operations for Bio-Techne and ACD as though the companies were combined as of the beginning fiscal The pro forma financial information for all periods presented includes the purchase accounting effects resulting from these acquisitions except for the increase in inventory to fair value and the fair value adjustments to contingent consideration as these are expected to have a continuing impact on cost of goods sold or selling, general and administrative expense, respectively. The pro forma financial information as presented below is for informational purposes only and is indicative of the results of operations that would have been achieved if the acquisitions had taken place at the beginning of fiscal  

 

		Year Ended
		June 30,
		2017				2016
Net sales		$	564,220			$	523,840
Net income			99,380				110,536

 

On the Company acquired Space Import-Export, Srl (Space) of Milan, Italy for approximately million. million was paid on the acquisition date and the remaining million was paid during the quarter of fiscal year Space was a long-time distribution partner of the Company in the Italian market. The acquisition resulted in goodwill as we expect strategic benefits of revenue growth from increased market penetration. The goodwill is deductible for income tax purposes. The business became part of the Company’s Biotechnology reportable segment in the quarter of

 

On the Company acquired Zephyrus Biosciences, Inc. (Zephyrus) for million in cash and up to million in contingent consideration. Zephyrus provides research tools to enable protein analysis at the single cell level. Addressing the burgeoning single cell analysis market, Zephyrus's product, Milo™, enables western blotting on individual cells for the time. The acquisition was funded with cash on hand. The purchase price of Zephyrus exceeded the preliminary estimated fair value of the identifiable net assets and, accordingly, the difference was allocated to goodwill, substantially all of which is tax deductible. Zephryus is included in the Company's Protein Platforms segment.

 

In connection with the Zephyrus acquisition, the Company recorded million of in process research and development which is amortized until it is converted to developed technology which occurs once a sale of its product is completed. In the quarter of fiscal the Company transferred the balance of in process research and development to developed technology and began amortizing the intangible asset after Zephyrus made its sale. The intangible asset amortization for the developed technology is deductible for income tax purposes.

 

The acquisition included contingent payments up to million.  million paid if and when instruments are sold prior to the -year anniversary of the closing date (and an additional million if and when million in cumulative sales are generated within years of the closing date (The Company made a million payment in the quarter of fiscal after Zephyrus sold its instrument and a million payment in the quarter of fiscal after Zephyrus met the million revenue milestone. Refer to Note for discussion of these payments as well as discussion of the changes to the fair value estimate for these milestones as of and

 

The goodwill recorded as a result of the Zephyrus acquisition represents the strategic benefits of growing the Company's product portfolio and the expected revenue growth from increased market penetration from future products and customers. The goodwill is deductible for income tax purposes.

 

 

On the Company acquired Cliniqa Corporation (Cliniqa) for approximately million. Cliniqa specializes in the manufacturing and commercialization of blood chemistry quality controls and calibrators as well as bulk reagents used for the clinical diagnostic market to further expand and complement our Diagnostics solutions. The acquisition was funded with cash on hand and funds obtained from our revolving credit facility. The purchase price of Cliniqa exceeded the fair value of the identifiable net assets and, accordingly, the difference was allocated to goodwill. Cliniqa is included in the Company's Diagnostics segment.

 

The goodwill recorded as a result of the Cliniqa acquisition represents the strategic benefits of growing the Company's product portfolio and the expected revenue growth from increased market penetration from future products and customers. The goodwill is deductible for income tax purposes.

 

The aggregate purchase price of the acquisitions was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as a result of the fiscal year and acquisitions (in thousands):

 

		ACD				Space				Zephyrus				Cliniqa
Current assets, net of cash		$	15,824			$	2,128				56				11,926
Equipment			2,757				159				32				1,436
Other long-term assets			3,812				-				-				58
Intangible Assets:
Developed technology			150,000				-				8,300				18,000
Trade name			21,900				-				-				1,100
Customer relationships			6,300				6,769				-				27,000
Goodwill			143,967				3,517				8,686				42,669
Total assets acquired			344,560				12,573				17,074				102,189
Liabilities			4,179				1,445				53				1,508
Deferred income taxes, net			52,743				2,125				2,521				17,793
Net assets acquired		$	287,638			$	9,003			$	14,500			$	82,888
Cash paid, net of cash acquired		$	247,038			$	6,747				8,000				82,888
Consideration payable			3,600				2,256				-				-
Contingent consideration payable			37,000				-				6,500				-
Net assets acquired		$	287,638			$	9,003			$	14,500			$	82,888

 

Tangible assets acquired, net of liabilities assumed, were stated at fair value at the date of acquisition based on management's assessment. The purchase price allocated to developed technology, trade names, non-compete agreements and customer relationships was based on management's forecasted cash inflows and outflows and using a relief-from-royalty and a multi-period excess earnings method to calculate the fair value of assets purchased. The developed technology is being amortized with the expense reflected in cost of goods sold in the Consolidated Statements of Earnings and Comprehensive Income. Amortization expense related to trade names, the non-compete agreement and customer relationships is reflected in selling, general and administrative expenses in the Consolidated Statements of Earnings and Comprehensive Income. The deferred income tax liability represents the estimated future impact of adjustments for the cost to be recognized upon the sale of acquired inventory that was written up to fair value and intangible asset amortization, both of which are deductible for income tax purposes, and the future tax benefit of net operating loss and tax credit carryforwards which will be deductible by the Company in future periods.